Q2 2022 John Wiley & Sons Inc Earnings Call
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[music].
Good day, and thank you for standing by welcome to the <unk>.
Wireless second quarter 2022 earnings conference call.
At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone if you require any further assistance. Please press star Zero I would now like to turn the conference over to your Speaker today, Wiley Vice President of Investor Relations.
Brian Campbell. Please go ahead.
Hello, everyone and thank you for joining us.
Few reminders to start the call is being recorded and May include forward looking statements.
You Shouldnt rely on these statements as actual results may differ materially and are subject to factors discussed in our SEC filings.
<unk> does not undertake any obligation to update or revise forward statements to reflect subsequent events or circumstances.
Arthur Wiley provides non-GAAP measures as a supplement to evaluate underlying profitability and performance trends.
You cannot just do not have standardized meaning.
Prescribed by U S GAAP in Dearborn.
And not be comparable to similar measures used by other companies nor should they be eager to alternatives to measures under GAAP.
Unless otherwise noted we will refer to non-GAAP metrics on the call variances on a year over year basis, and will exclude the impact of currency.
After the call a copy of the presentation playback of the webcast will be available on our Investor Relations webpage.
I'll now turn the call over to wireless.
Brian.
Good morning, all welcome to our Q2 earnings call.
While the team has delivered another quarter of solid performance underscoring wildly leading position in the knowledge business strong performance in serving the ever increasing demand for scientific research and career connected education as.
As you know, while we drive impacting <unk>, we enable scientific discovery, we powered career connected education and reshape workforces.
In a world hungry for innovation and opportunity, it's not surprising that we're finding strong growth in our research and education businesses.
While we reported good revenue growth of 9% this quarter, 5% of which was organic driving a 7% increase in adjusted EBITDA and a 6% increase in adjusted EPS.
Revenue was up 9% and researched 3% and APL and 15% in edge services as a reminder, all variances exclude currency impact.
John will touch on our first half results, but I will say upfront that we are very pleased with how the year is progressing and we continue to track well to our full year guidance for revenue earnings and cash flow.
Our growth strategies are largely on target and you can see that they are paying off.
They remain well aligned with favorable and enduring market trends such as the shift towards open research that focus on career connected education and the drive of corporations to fill the widening talent gap.
These trends are creating significant demand for our transformational open access research model for our career focused learning programs and for the talent development services that we provide to corporations.
In the quarter, we continued to see strong post lockdown recovery and professional learning, which more than offset a decline in education publishing.
Which was driven by softness in U S fall enrollment and the easing of last year's Covid related tailwind along with the disposition of our world languages content portfolio.
Meanwhile, accelerated growth and talent development more than offset the easing of last year's Covid related tailwind in online education, where enrollment growth slowed to 3%.
As announced in October John Chris Michael You're retiring at the end of December for eight critical years, John has been an exceptional leader for wildly helping to drive our strategic direction expand our growth profile and strengthen our financial position. He built an outstanding finance organization and leaves us well positioned for growth.
The future of it.
Half of the board of directors and of all colleagues worldwide I want to thank John for his strong principled leadership.
We all wish you the very best in all of those to come.
Thank you Brian.
Also on the call today with US is Kristina Vantassel, our new Chief financial <unk> Financial Officer, Christina joins Us from Dow Jones, where she served as CFO and helped to grow leading digital information businesses like the Wall Street Journal, Barrons Marketwatch and Factiva.
For that she was CFO access at WPC company.
She brings to wildly over 30 years of broad financial leadership strategic insight and a proven ability to drive operational excellence.
Looking forward to partnering with her on our next phase of growth welcome Christina.
Thank you Bryan and Hello, everyone.
Great to be here.
I have long admired wildly French remarkable legacy its financial strength and meaningful contributions to society.
I believe our deep network of partnerships with the world's leading universities and corporations and our unique position as an advocate for researchers and learners will allow us to win to win in a dynamic global market, which continues to rapidly evolve.
I also want to take this opportunity to thank John for example, and for building a terrific finance organization.
I look forward to working with the <unk> team to further accelerate growth to drive innovation and to consistently deliver strong results and shareholder value.
I also look forward to meeting all of you. Thanks.
Well, it's just great to have you on the team Kristina.
So I want to start today by talking briefly about the large corporate opportunity that we are now tapping into across Wiley as you know at its core Wiley the knowledge and learning company.
And in a world, where new information, new discoveries and new capabilities are the engines that power innovation and growth. While he is very well positioned which you can see in our year over year growth of 17% for research corporate solutions, 15% for professional learning and 67% for corporate talent development.
Corporations need our research content platforms and databases to achieve their commercial objectives.
While he provides a cutting edge knowledge that companies need to develop new products and our platforms and services helped those companies to achieve their marketing goals.
For example, we just kicked off an ambitious project with pharmaceutical giant Eli Lilly to build or educational lead source hub in critical disease areas.
This helps them to educate and activate their health care community and increase their brand engagement.
Through the Wiley online library of proprietary research content platform, we can provide direct access to over 15 million scientific medical and technical researchers.
This resulted in a $179 million extremely valuable impressions per month, so targeted media and advertising will be an increasingly attractive business for us is the wildly network partners grows.
While they are expanding portfolio of partner solution also includes digital career centers that help employers to build a critical jobs with qualified candidates.
For example, we just renewed an important partnership with our partner Pfizer to manage its career center.
Of course, any CEO will tell you that building a winning workforce with the right skills and capabilities is now both their biggest pain point and their biggest opportunity for this reason Wiley is increasingly on the front lines with our corporate clients and the escalating the war for talent.
We've always played an important role in helping universities to supply career ready talents of the labor market and we continue to do so effectively in education publishing and University services.
Today, the world's leading companies are increasingly turning to wiley to directly address their most urgent talent needs you can see this in the success that we're having with our professional learning and talent development solutions.
Here wildly playing an essential role in helping companies to attract train retain upskill and reskill their talent and teams.
We're rapidly signing up new clients to create hard to buying tech and digital business talent we.
We secured six more major global corporations in this quarter and are seeing unprecedented growth and employee placement.
Moreover, the opportunity to expand client relationships with additional skills based training continues to expand.
During the quarter, we expanded our relationship with one of our largest fortune 100 clients and we will now be re skilling their existing employees with critical digital skill.
This will help them retain valued experienced colleagues and prepare them to contribute in new.
The return on investment of these re skilling activities is very high for our partners and of course for wireless.
Every day, we are talking to our multinational clients about similar value added services.
And another example of how the corporate opportunities influencing all of these activities. We are now delivering a customized self serve platform to our clients that strategically connect their employees with career enhancing degree and certification program. While also managing the burdens of administration of tuition reimbursement.
With that let's move on to our segment performance.
Research again delivered strong revenue and profit growth with revenue up 9% or 4% on an organic basis and adjusted EBITDA up 10% for Q2 EBITDA margin of 37%.
Our performance was driven by double digit growth in open research publishing corporate solutions and research platforms.
Research article output rose, 8% year over year, driven by the Hendawi acquisition.
Organically article output was actually lower by comparison to last year's Covid driven surge when lockdowns caused an unprecedented 22% increase in output as millions of researchers exited the lab and focused on documenting their research.
That said the organic trend line continues to be very positive with a two year average output growth of around 9% per year very strong indeed.
Demand did publish remains robust.
<unk> to the ever increasing global investment in science and second due to the enduring draw of our Wiley Journal brands.
In the quarter, we announced a multiyear transformational agreement with the Council of Australia and University Library.
This is the largest REIT in published agreement to date in that region. The agreement provides subscription access to all of Wiley journals and of grants researchers at 50 team participating institution the ability to publish accepted articles by open access in Wiley journals.
In early November we announced a multiyear transformational agreement with the Virginia Library consortium involving over 70 library. It was our 15th transformational agreement globally and seventh announced in 2021, we see a very strong pipeline ahead.
As a reminder, these strategic agreements are great for our large customers and great for us.
They drive significant incremental publishing volume and move us closer to a P times Q ecosystem, where revenue is a direct function of the quantity of articles published in the price we charge.
And on the quantity side the outlook the outlook looks very good.
For publishing output in the years to comment on the pricing side, while we continue to enjoy very solid pricing power due to the draw of our high quality Journal portfolio.
The result of this is a very healthy dynamic and continued revenue gains.
As you know wildly partners with over 900 of the world's leading academic societies and research publishers, helping them all to succeed in an increasingly complex information ecosystem, specifically our partners' needs.
Supporting crossing the chasm to an open access future and Wiley helps them adapt to the complexity, while generating new revenue streams for them by leveraging our industry, leading platform and services.
This area is what we referred to as partner solutions.
We recently made two exciting new acquisitions to broaden our offering in this key growth area.
First J&J editorial provides world class highly efficient production copy editing system support and consulting support to 120 demanding societies and publishers.
The second knowledge Unlash helps our clients and partners.
Dressed a critical pain point the processing as scale of per article open access transaction. This is one of the most complex challenges in the open transition tools and data analytics.
Yes.
Without these key link.
Thanks in the commercial value chain, many of the world's societies and publishers would simply not be able to participate in the open.
Future.
In summary, we have strong momentum in research and this is reflected in our current operating performance and the success of our strategic initiatives, which will deliver even greater opportunity for growth in the future.
Academic and professional learning rose, 3% this quarter, driven by 15% growth and professional learning.
Adjusted EBITDA rose, 18% for Q2 EBITDA margin of 33% this is Doug.
From a 29% margin in the prior year period.
As noted after last year's Covid related debt that we are seeing continued strong recovery and professional learning as corporations and professionals focused intensely on building the capabilities that they need to succeed in the post pandemic environment.
As is evident in our strong year over year growth in professional publishing any corporate training.
Professional publishing continues to benefit from timely publication of titles in areas like investing DNI and leadership.
Corporate training continued to deliver strong performance through virtual and in person delivery with revenue growth of 24%.
Education publishing revenue was down 5% this quarter. The result of the softer U S enrollment the easing of pandemic related tailwind for content and courseware and the sale of our world languages portfolio.
U S fall undergraduate enrollment and important driver for US was down 3% as University has continued to manage through the challenging enrollment environment.
Printed course materials was down 15% offsetting modest growth in digital content in the second quarter print of course materially represented only seven 5% of Wiley revenue down from nearly 9% in a year ago period. We continue to see positive trends ahead for digital content and courseware in this market will see continued.
Declines in print, resulting in a full year revenue outlook for education publishing that is roughly in line with the prior year.
In summary, the strong recovery in professional learning this quarter from robust demand for professional content and skill based training more than offset a year over year decline in education publishing.
Our and growth for the quarter with University services up 3% and <unk> talent that we $10 million down 35% due to higher student acquisition costs and University services and investment and talent development to accelerate the expansion of client relationships, our adjusted EBITDA Mark.
<unk> for the segment was 12%.
Unity University services growth was also impacted by softer fall enrollment in the U S with graduate enrollment up 2% compared to 6% last year and undergraduate enrollment down 3% enrolled.
Enrolment in our online programs was up 3% compared to 14% enrollment growth in fiscal 'twenty, one when COVID-19 COVID-19 shutdown.
Down campuses and forced the southern shift enrollment online.
If you normalize it out over two year period enrollment in our online programs was up 8% on average so a very solid trend line overall for online education for us.
We recently added New York based the Delphi University, a top 200 school as a new full service partner and we signed an important renewal with Georgetown University, along with adding 14, new degree programs with existing partners, we're seeing good momentum in markets like Australia and.
And with innovative short course program and subject areas like cyber security artificial intelligence bioinformatics and crypto financed.
And talent development as I talked about earlier, we're rapidly signing new corporate clients of selling existing clients and expanding into new vertical in today's economy. All industries are in dire need of tech and digital skill.
And this is reflected in the multinational clients, we signed this quarter, which come from multiple sectors, including financial services food services and facilities management.
We also grew talent placements with our existing fortune 100 customers by nearly 130%.
As noted we're also making very good progress in up selling additional reskilling services to our existing client momentum is clearly accelerating.
In summary, we continue to see strong growth in edge services as we expand our partnerships with leading universities and corporations to attract to educate the place to retain to upskill and to rescale talent needed to succeed in the global digital economy.
With that I'll pass the call over to John to take you through our outlook and our financial position.
Thank you, Brian and good morning, everyone.
As Brian noted the wildly team continues to execute on our growth strategies and drive operational improvements throughout the business.
I'd like to briefly recap our first half performance, which clearly demonstrates that we are tracking well to our full year outlook.
Revenue was up 9% to $1.02 billion or 6% organically with research up 10% APR.
<unk> ACL up 5%.
Ed services up 14%.
Adjusted EBITDA was up 9% to $222 million driven by first half profit contributions from recent.
Our six months adjusted EBITDA margin was 22%.
Adjusted EPS rose, 10% to $2 14.
As a reminder, our adjusted EPS metrics now exclude the noncash amortization of intangible assets recorded in connection with our acquisitions.
I would also again note that all variances on the slide are shown at constant currency.
Okay.
Due to our first half results by $19 million in revenue.
$2 million, and adjusted EBITDA, and <unk> <unk> and adjusted EPS.
Given our first half performance and leading indicators, we are reaffirming our fiscal 'twenty two guidance, which includes revenue growth of mid to high single digits to a range of 2.07 to $2 1 billion.
Adjusted EBITDA is expected to range between 415 and $435 million with profit gains on higher revenue tempered by investments to accelerate growth.
<unk> and $4 20.
Free cash flow is expected to range.
$20 million.
As a reminder, while cash earnings are again expected to be.
Strong in fiscal 'twenty, two we see certain headwinds compared to fiscal 'twenty, one, including higher Capex higher net cash funds received in fiscal 'twenty one.
And higher annual incentive.
So 'twenty one outperformance.
Here.
One further note on these projections.
<unk> FX rates are in line.
And with the rates prevailing when we issued our guidance in June.
Turning now to our balance sheet and cash flow our net debt to EBITDA ratio was two one at the end of October compared to one nine at the same time last year.
At quarter end, we had $101 million of cash on hand, and undrawn revolving credit capacity of more than $435 million.
Free cash flow in the first half was in line with prior year, driven by higher cash earnings offset by higher annual incentive compensations for our fiscal year 'twenty one performance.
Capex was $51 million up $3 million.
We invested $14 million and acquisitions.
We will continue to be active on the M&A front as we seek to add capabilities to our core strategic areas of focus in research and career connected education.
Finally, $56 million was allocated to dividends and share repurchases up from $38 million in the prior year period due to our COVID-19 related pause and share repurchases last year.
As a reminder, we raised our dividend payout in June for the 28th consecutive year and our current yield is roughly two 5%.
So far this year, we've repurchased 313000 shares at an average cost per share of $55 and 51 for.
For total spend of $17 4 million.
We have $200 million remain in the current share repurchase authorization.
Before I pass the call back to Brian I, just want to thank all of our Wiley stakeholders, including our investors colleagues and coverage analysts.
Your engagement and support over the years.
Wish you and your families well, while he is a great company with very capable leadership and a bright future ahead.
Thanks, very much John.
Okay.
At our core and everything we do while he is driving positive impact, whether it's delivering more cutting edge knowledge to the world faster and more openly while unlocking career potential for millions of learners and workers.
As I've said before the more researchers and learners that we help the greater the positive societal impact.
And with wildly as is evident in our leasing performance positive impact is very good for business are.
Our colleagues are highly motivated by our ability to drive impact both within our walls and out in the world through our products and services.
We're widely recognized for our impact that had been deemed a very low risk company from an ESG perspective. In fact, we are rated in the fourth percentile globally for ESG risk by sustained Olympics Morningstar company. We're very proud of this rating, but we also know that there's always more room for improvement.
Improving the price value equation and education is one of our longstanding objective and as an education services provider transparency about education outcomes is critical to this end. We recently published a transparency report that highlights the affordability accessibility and outcome of our partner degree programs. The data is clear.
And it shows the graduation and retention rate at our partner institutions are materially higher than a comparable not for profit online schools.
The data also showed that the cost to earn a degree at our partner program does the lower for instance on average.
An online MBA cost $25000 in one of our programs, which is $6000 less than the market average.
Our nurse practitioner MFS is $4000 less than average across Wiley, we're always looking for ways to lower the cost of education, while improving career outcomes.
Today Wiley the digital company with 83% of our revenue generated by digital and tech enabled products and services.
That said, we still have many opportunities to reduce our environmental footprint, including the impact of our printed products, which represents 17% of our revenue.
And we're working hard on that this year alone we actively reduced our printed journals by $1 1 million units to our go Green program saving 8000 trees.
Do things shipping poly bags by another $1 1 billion units and eliminating the significant footprint in shipping.
Going forward, we will plan to training for every print copy wildly actively <unk> printing as a symbol of our commitment to reducing our carbon footprint.
In everything we do the colleagues of widely are working to drive positive impact.
Let me quickly summarize the key takeaways before I open it up for questions.
While we have delivered strong first half performance with revenue and earnings growth driven by solid performance across segments.
The long term favorable trends that had been defining our market continue to roll forward, including the shift to open research the increasing focus on digital career connected education and the ever growing need of corporations to fill the widening talent gap wireless business today and its growth strategies are tightly aligned with these trends and you can see this in our current perform.
<unk> and full year outlook.
We continue to drive real world impact and advance our ESG and sustainability initiatives inside Wiley and out in the world through our research and education products and services.
Given our solid first half performance and positive indicators, we are reaffirming our full year outlook and we're well on our way to surpassing $2 billion in revenue for the first time in a long and illustrious history.
On behalf of all Wiley colleagues worldwide I wanted to again, thank John for his partnership and his remarkable contribution to widely over the years.
One more note because I know that the great resignation is on the top of everyone's mind.
There is no doubt that the last two years have caused many to reevaluate their career pathway, but I will say that I feel very good about wildly terrific team.
Our engagement levels are very high by any standards and our colleague retention is well above mentioned benchmarks.
We're clearly able to attract amazing talent to join our journey.
One reason for all of this is our attention to ensuring a people centered culture, which includes a real commitment to personal growth and career development.
And at a deeper level is also due to the passion that all of us at while we have for our mission and the real benefit and the real belief in the impact that each of US can have on the world every day.
My personal goal is to make sure a wildly remains the place to be in research and education, especially at this time of year and grateful for our wonderful Wiley colleagues and then their enduring dedication to each other if the last two years of proven anything it is that our commitment to take care of each other and the global community is more important now than ever.
And that research and education are at the very foundation of our long peaceful and prosperous future at 2021 comes to a close I want to wish everybody in the widely community and all of you a very joyful holiday season, and a happy and healthy 2022.
I will now open the floor to any comments and questions.
At this time, if you'd like to ask a question I'll have a comment press star one on your telephone keypad again that is star and the number one.
Your first question is from the line of Daniel Moore.
P J S securities.
Thank you good morning, and thanks for taking the questions.
Sure.
They'll start start quickly John just.
First off thank you for your candor and transparency over the last eight years, it's been great working with you and certainly look forward to working with Christina.
I will start with the research.
Obviously article submissions.
Benefited two significant degree from the pandemic and we're seeing that tough comp now when do you expect to sort of get through those comps and maybe get back on a more normalized mid single digit.
Growth trajectory in terms of research article output.
Yes, it's obviously a very important question Dan.
We we.
We feel very good about the long term trends in the business.
We've always felt good about them, they're working their way.
Yes.
And all of our businesses and I think all Ceos Youre seeing this year last year with a particularly unusual year. This year is equally unusual is often in the reverse direction.
Difficult to sort through all the tea leaves, but we're seeing a trend.
In all of our data that tell us that we're reverting to back to norm.
We feel very good about a 9% two year average as we as we highlighted.
And and that underscores what we've been saying for a long time about.
The long term investment and research leading to long term output.
Also it's important to know that.
That our OE businesses are growing very significantly more than 80% year on year and thats critical for the.
For the financial dynamic as we go forward, so you're going to see the stocks.
Sort itself out over the balance of this year.
It's not in the long run we're reverting to the norm if not more than the norm as increased investment.
Occurs and as we take an increasing share, which we have been doing for the last four or five years.
Very helpful shift gears to academic and professional start with Ed publishing do you expect that we are back on a sort of moderate decline trajectory in terms of overall revenue or was this quarter.
Is it more.
One two to three quarter phenomenon given.
Enrollment rates and what we saw across the board at most universities. This fall.
Yes look again, it's the same comment I can make for any of our businesses, which again any CEO is going to make these days.
Last year was very unusual this year was unusual in academic and professional particularly in Ed pub, which is what I think youre focusing on what we are what we're seeing is is that yes. The long term trends from printed digital continue.
The business is now 60% digital so we feel really good about that we feel really good about the trajectory we feel really good about the fact that.
That universities continue after all of the transition to use gold standard published product like ours to in their classrooms and in their online settings. So we feel very good about all that.
And so so in the long run I don't see any any reversion I see a continuation of that and the continuation of these things washing out over.
<unk> set a set of set of quarters not a set of years, but again I feel I feel very good about the business.
And <unk>.
Continues to be an extremely.
Good and profitable business for us and we'll see we'll see.
How we do going forward, but but.
But I think the story Hasnt changed and I think that's underlying your question is the story change story is the same.
Perfect and professional learning.
Obviously, a really nice bounce back here and that business frankly held up better than maybe some of the thoughts to the pandemic, but where are we relative to pre pandemic levels for those underlying businesses and professional learning.
No.
The variance of risk to the recovery or do you think we've sort of learned to work hybrid or remote enough that we just kind of continue to chug, along and continue to recover from here.
Yes look we're still below the levels that we were before the pandemic.
Cause in person training, certainly hasnt really hasnt.
Return at that level, because we're not back in the office and people are behaving differently. So we are we.
We are.
Currently trending at about 10, or 15% below where we were pre COVID-19, but there are some really good developments in that business and the development are as we've talked about in prior quarters. During this pandemic, we actually turn to business that was primarily about in person training into one that is now primarily about or I should say balanced between.
Online and in person training, so that allows us to have digital relationships not just with our companies and our managers, but with the people that go through the training, allowing us to do a better job because training just episodic, but we have a long meeting I do training and then maybe two years from now and do another training, but we got to have that relationship on a night.
Ongoing basis.
And we get to us because of the longer term relationship have a longer lifetime value.
So, yes, we're still below but but we're trending back very nicely.
We expect we fully recovered by the end of this fiscal year and that full recovery would be would be at a with a business that in our opinion is way healthier with a lot more growth potential than we had going into the pandemic look in short Dan what happened is COVID-19 forced the digital transition where there should have been won but people.
Before because it's better just as we say across many of our businesses but.
So enforced that transition and now when we catch up to two.
Demand as we get back to a more normalized situation, we will have both a healthy in person and healthy online business. So we feel again, we feel good about.
Very helpful. Maybe shift gears on a roll here, but Ed services.
Can you maybe give a little more delineation in terms of profitability between OPM and talent development just trying to understand.
Where we are in the trajectory for each given the upfront investments I think you mentioned was more on the OPM side.
Yes, good morning.
The specific numbers, but then there would be helpful.
Sure well, we're not we're not breaking out the individual margins of those of those divisions, but as we have said in the past.
These are growth businesses and where.
Best thing and then we're running them three.
We're running in three at around breakeven trying to get it to grow and take advantage that huge opportunity that obviously spoke a lot about today.
As we are across many of our businesses that corporate opportunity.
And in the in the.
And services side, we are certainly investing we're investing in marketing to help our partners grow we are investing in new partners and we do expect in the mid <unk> in the long term as we've said many times that that 15% margin completely achievable and.
And we continue to run that business very profitably.
Which you know is a big accomplishment in this segment. So so no change there running both of the businesses.
As growth businesses, and we're investing significantly in both of them and in this segment overall.
So, yes I think.
John would you add anything to my comments there.
No Brian I think you've described it well.
Roughly you mentioned profit margins, so just to be clear, we're talking about adjusted EBITDA margins on these businesses.
Again, we're running.
Talent development business for growth.
Not trying to drive improvements in profitability there, it's close to neutral on an adjusted.
EBITDA basis, but we are running for growth there and you can see that in this quarter's results with 67% revenue growth.
And again on the University services side that business is geared up for long term adjusted EBITDA margin of 15% or higher.
And we're going to keep it there overtime.
The plan.
Got it.
Just in terms of the performance year to date, both top and bottom line. It's been ahead of our projections. Just curious if you see the higher end of the guidance as being maybe being more likely or is it would you describe it is basically in line with your internal forecast to date.
Yeah, and I would describe the results year to date is roughly in line to our expectations year to date.
Clearly we are trending a bit ahead or do it you would think that we're trending towards the higher end of the range. Hence your question, but I would say that we do expect to see a bit of the investment that we called out when we issued our guidance to be in the back half of the year versus the front as we ramp up on some of our <unk>.
<unk> so.
I wouldn't start to precise about where we land in those guidance ranges.
I would point out that we've got some investment on the backend and we feel very confident about where we're trending at this point in the year.
Excellent last one.
You bought back $10 million of shares in the quarter clearly continue to ramp up.
Cash returned to shareholders.
Is that a reasonable run rate going forward, obviously, you're going to see.
Super strong balance sheet and cash generation is there anything precluding you from maybe being even more aggressive here. Thanks for the color on everything.
Yes, I would say that you should expect us to roughly stay the course now we don't have any particular changes that are planned we continue to drive a balance between investing in the business, both organically and with acquisitions and returning cash to shareholders in the form of Av.
Dividends.
And so.
We're going to.
Likely stay the course in the near term continuing to maintain that balance that we seek.
Longer term capital allocation investing for growth.
Very good. Thank you both thank you for all the color.
Thank you very much Dan.
Again, if you'd like to ask a question I have a comment press star one on your telephone keypad again that is star and the number one.
There are no further questions I will now turn the call back over to Mr. In APAC for closing remarks.
Alright, I want to thank everyone for joining the call today and again wish everybody a very very happy holiday, a healthy new year and I look forward to sharing our third quarter results with you in March.
Ladies and gentlemen. This concludes today's conference call you may now disconnect.
[music].